European markets are trading significantly lower today responding to a sell-off on tech stocks in the US on Friday  and awaiting the meeting of the Federal Reserve on Wednesday. Our weekly preview of the most important market moving events is available here.

The DAX Index  declines by 1.13 percent (DE30), CAC40 trades lower by 1.23 percent (FRA40) and the pan-European Stoxx 50 is down by 1.22 percent.

link do file download link The DAX is trading in the negative territory as investors took cautious approach as they came to terms with a hung parliament in the UK and an eventful calendar this week. Information and Technology sector is taking the biggest hit, tech stocks extends its losses as Nasdaq Composite lost 1.8 percent in North American session on Friday.

Among the worst performers in the German index is Infineon Technologies AG (IFX.DE) that has been the subject of a rating report. Zacks Investment Research downgraded the outlook for this Germany-based developer and manufacturer of semiconductors from “buy” to “hold”. According to Zacks Investment, Infineon’s second quarter showed that there were significant growth prospects in the automotive market due to growing hybrid and fully electric vehicles globally. However, a slowdown in smartphone sales can prove to be a major drag going forward. Additionally, the cyclical nature of the semiconductor industry and price erosion is likely to be a major headwind going ahead. Infineon Technologies AG lost its ground and is currently trading 3.92 percent below Friday’s close.

On the other side of the spectrum, automakers are trading in the positive territory with the Volskwagen AG (VOW.DE) as the best performer. VW is looking at rehiring the chief executive of General Motor’s Opel, possibly to lead its Audi brand, according to Reuters. While both companies decline to comment on the matter, Karl-Thomas Neumann would fill the position of Rupert Stadler who has come under fire for how he has handled the fallout from VW’s diesel emissions scandal. Volskwagen shares rise by 1.36 percent during the early phase of the European session.

The DAX is consolidating for quite some time now and even the UK’s election result failed to spark higher volatility. Price action remains tilted to the upside as the area between 12564 and 12491 acted as a strong support preventing further decline. There is no market moving event in the calendar today that could produce an impulse for the index. This week however, is full of main central bank’s decisions on interest rates that could provide market direction.

link do file download link

The DAX is trading in the range giving little opportunity for investors to ride the trend. In this type of market, the best attitude would be “buy low, sell high”. Price bounced of the support located between 12564 and 12491 and raised to the new local highs but declined almost instantly. That has left the index with a gap where price is currently struggling at. Area between 12842 and 12880 is considered a local resistance but keeping in mind the prevailing trend, a stronger push could break this zone.

link do file download link On the shorter time horizon, the DAX is trapped in a range between a local support at 12672-12637 area and a local resistance at 12800-12820. Price reacted on the upside from the resistance and now we can observe a fight of bulls and bears at the current support area. No indication of which direction the price will go for now, market needs an impulse.